Has Yale’s B-School Fallen From Grace?

Yesterday, on twitter, a reporter from U.S. News was asking to speak to current business school students and recent business school alumni to ask a question. He didn’t say what the question was but I was intrigued by idea of talking to someone from U.S. News, so I responded.
He called me within 3 minutes of my sending him my phone number and the question he wanted to ask was with regards to this article from the New York times about Yale’s business school, which I hadn’t read at the time of our conversation.The question was this: If you would’ve have found out that your school lost $15-20 million over the last decade as the NYT article discusses in the case of Yale, and does this news discredit their ability to run a successful business program?

Not having read the article, my answer was my decision would not have necessarily been changed, no it does not discredit their ability to run a successful business program. I came to this conclusion based on 3 things:

1. I had zero idea how they lost the money, was this a function of risky investments or some sort of gross negligence. Even after reading the article, it’s unclear what exactly happened to result in such massive losses.
2. Experts in the classrooms weren’t necessarily part of the administration team. What I mean by this is that I’ve seen cases where service providers (e.g. accountants/consultants) are so good at servicing their clients that they sacrifice in their personal/internal situations. I don’t know if this was the case at Yale, but it doesn’t seem that far fetched.
3. Yale is still one of the most power brands in academics.  Even with this news coming out, I can’t imagine a situation where an individual having Yale on his or her resume for undergraduate or business school would ever be at any sort of disadvantage.  The fact is, whether people admit it or not, they give much more credibility to institutions they know, and everyone knows and respects Yale.

Now that I’ve gone back and read the article, my initial stance hasn’t really changed as none of the root causes were revealed in any sort of detail. For some reason I am surprised, though, that there are people that specialize in restructuring business schools. I’ll be watching this case closely to see how things develop.

What are your thoughts? How Would this impact your decision?